All the elements of the great dysfunctional family that is the Liverpool boardroom were in Anfield yesterday: the Americans and the English, the factions and the grudges. Looking around the directors' box you would find it hard to get that lot to agree on anything, apart from, perhaps, the genius of Fernando Torres.

Thanks to Torres, the fight goes on. Liverpool stay in the title race as Manchester United raise their pace to a gallop. The gap may be two points and a game in hand to United but somehow, miraculously, Rafael Benitez's team are still putting up an argument despite the politics of the club, the farce over Robbie Keane and the increasingly erratic behaviour of their manager. They are in with a shout and that in itself is remarkable.

Torres cut through the traffic on 88 minutes to head in the decisive goal before he added the second in injury-time to unite this unhappy house of Scouse in joy just when they were beginning to wonder if it really was all over. They did so with the benefit of a deeply questionable performance from referee Mike Riley who sent off Frank Lampard having failed to do the same to Steven Gerrard when the latter had committed a foul of greater severity minutes earlier.

The sending off was the match's turning point, when Liverpool's control of the game turned into a siege of Chelsea's goal. It was the point when Liverpool's divided co-owners George Gillett and Tom Hicks, along with their two sets of American guests, freshly decked out from the club shop, sensed that, for all their unfamiliarity with local custom, they were about to witness something very special indeed.

From Torres came the moment of brilliance, a service that Gerrard has been too often obliged to deliver of late, and so life was breathed into Liverpool's title challenge. At the same time, there was little sign of a pulse in Chelsea. Amid the rapture at Anfield there was the sense that this team have nothing left to give and – for all their bad luck with Lampard's red card – the situation is grave.

Scolari said that Lampard's tackle did not warrant a red card but he did not do so with the urgency of a man clinging on to his football reputation by the fingernails. Rather he pronounced breezily that, yes, this title race is getting more difficult and that things are looking rather bleak for Chelsea. Does he care? He says that he does but few managers can have remained as calm about a performance as gutless as Chelsea were.

Instead the Chelsea manager offered a trade-off to the Football Association in which they rescind Lampard's red card, for a challenge on Xabi Alonso, in exchange for a ban for Jose Bosingwa. As plea bargains go it was bizarre but honest nonetheless which is rare for a manager with his back up against a wall. Bosingwa thrust his studs into Yossi Benayoun's back late in the game out of sight of Riley, an incident that will be reviewed by the referee and should get Bosingwa banned.

Where does this leave the Chelsea project? Back at the point where you wonder whether even £100m will fix it this summer, and that is before anyone considers whether Roman Abramovich has the inclination to spend it.

Didier Drogba's appearance as substitute, some of it spent on the left side of midfield, looked more like an act of protest. Florent Malouda was ineffectual and Chelsea's first meaningful attempt on goal, from Salomon Kalou, came on 75 minutes.

If Lampard misses the next three games, then that might well spell the end of their challenge. Apart from Alex da Costa, who was the man of the match until Torres beat him to the ball for his goal, and Jon Obi Mikel, Chelsea are shrinking. John Terry's booking means he misses the FA Cup game against Watford. The pressure is on Scolari whose record against the three other members of the big four is now a lamentable lost four, drawn one.

The game caught light on the hour, two minutes after Gerrard had gone through Kalou with a challenge that showed more than a glimpse of the Liverpool captain's studs. It was reckless. Riley looked hard for a moment and let it go, which was a moment longer than he gave himself to make his decision on Lampard.

That time the Chelsea man went in with his studs up, played the ball and Alonso went over him. The flash of studs was what Riley must have seen, he cannot have got sight of the clean contact Lampard made with the ball, if anything it was the Chelsea man who was the victim, caught on the shin by Alonso's trailing leg. But by then Riley was already reaching in his back pocket.

There is no love lost between Alonso and Lampard, Lampard broke his ankle in a challenge on New Year's Day 2005 and Alonso has never forgiven. Yesterday Alonso made sure that he stayed down long enough to make it look like Lampard's challenge had really hurt. Lampard's only hope will be that the FA overturn the red card as quickly as they did for Paul Robinson, sent off for West Brom against Manchester United on Tuesday.

Then came the siege. Alex had done a brilliant job on Torres until the striker got to Fabio Aurelio's near post cross a fraction before the Brazilian and headed past Petr Cech. Ashley Cole gave away the second, letting in Benayoun, then tackling him and inadvertently squaring the ball to Torres who scored.

Can Liverpool do this every week? If they want to keep up with United they may have no choice.

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